Dubai India's New Delhi airport will soon become the world's most expensive airport as regulator Airports Economic Regulatory Authority of India on Wednesday decided to raise airport charges by a whopping 346 per cent for two years starting May 15.
Condemning the move, airlines which will have to pay more for parking and landing in New Delhi, said they will be left with no choice but to pass on the additional costs to passengers, according to reports in the Indian media.
Simply put, passengers flying into or out of New Delhi's Indira Gandhi International Airport's two terminals T1 and T3, will have to pay much more for their tickets.
Ticket prices
According to GMR Infrastructure, the body which runs the two terminals of Delhi's airport, the approximate increase in ticket pricing on account of passenger fee alone would be around Rs290 (Dh20) in the domestic sector and Rs580 in the international sector.
Emirates, which hopes to increase its current 54,000 weekly seats to India, says it's concerned by the Delhi airport's latest move.
"Emirates is concerned by the proposed increase in airport changes at Delhi airport. We are currently in discussions with the relevant authority," an Emirates spokesperson told Gulf News, adding that the airline had no further comment to make at this time. The Indian subcontinent generates about 11-12 per cent of Emirates' revenue with India commanding a chunk of that.
Etihad Airways and Qatar Airways, meanwhile, did not respond to Gulf News queries.
The massive fee hike comes at a time when India's aviation sector is almost crippled by the woes of debt-laden carriers such as Air India and Kingfisher Airlines.
IATA rebuke
Calling the move "extremely disappointing", global aviation watchdog the International Air Transport Association says this move is a "big step backwards" for Delhi's ambition to be an aviation hub.
"India's aviation industry is already sick. This increase in Delhi's charges will put it in intensive care from a cost perspective.
"The government needs to better coordinate its policies on aviation. While on the one hand the government is trying to help the airlines, the increase in Delhi's charges will set back significantly whatever assistance the government is trying to provide," Chris Goater, IATA's spokesperson, told Gulf News in an emailed statement.
He added that the four-fold increase will pose a huge setback to India's tourism sector.
"It will have a larger impact on India and its economy, with an expected 5-8 per cent decrease in demand at Delhi as a result of higher costs, a fall in tourist arrivals and further damage to local and international airline connectivity," Goater said.
Passenger impact
According to Geneva-based aviation analyst Andrew Charlton of Aviation Advocacy, airport charges amount to "about five per cent of airline costs" in most markets around the world.
"Every cost increase is inevitably going to find its way to passengers eventually, either as a fee imposed immediately or in higher fares over time," he said, adding the move will have no impact on business and premium travel.
Further commenting on the likely impact on Gulf carriers, Charlton said that it will be an "imposition" for them [Gulf carriers] on the price-sensitive end of the market as well for the budget carriers that fly to India.
Meanwhile, the Indian government last week reportedly deferred its decision on the proposal that seeks to allow foreign carriers to own up to 49 per cent in Indian airline companies, to end-May.